DJIA: 36,236.47, down 170.64
S&P 500: 4,696.05, down 4.53
Nasdaq: 15,080.87, down 19.30
Stocks edge lower after a choppy session
U.S. stocks fell on Thursday as investors weighed economic data and assessed the likely path of monetary policy. After swinging between gains and losses for much of the session, the S&P 500 slipped 0.1%, while the Dow lost 170 points. The Nasdaq Composite declined 0.1% on the heels of its worst one-day performance since February (-3.3%). Treasuries were mostly lower for a fourth consecutive day, with the yield on the 10-year note up four basis points (0.04%) to 1.73%, a peak not seen since last March.
Yesterday, stocks turned firmly lower after the Federal Reserve’s (Fed) December meeting minutes revealed policymakers contemplated a rate hike “sooner or at a faster pace” than originally anticipated. Additionally, some officials began discussing policy normalization in terms of potentially reducing the overall size of the central bank’s $8.8 trillion balance sheet “relatively soon.” Earlier today, St. Louis Fed President James Bullard, a more hawkish policy maker and voter this year, noted that rate liftoff could come as soon as March.
On the data front, weekly initial jobless claims came in at 207,000, modestly rising from the prior week’s upwardly revised 200,000 figure. Separately, a report from the Institute for Supply Management (ISM) showed U.S. services sector growth decelerating more than expected in December, with the purchasing managers’ index (PMI) print dropping to 62.0 from November’s record high of 69.1.
Six of 11 S&P 500 sectors finished in negative territory, with Materials leading losses. Health Care also lagged with Walgreens Boots Alliance Inc. down 2.9% despite topping analyst earnings projections. Energy shares outperformed as WTI crude jumped 2.1% to $79.48/barrel.
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